The shutdown of the United States Government began at midnight EST on Saturday, December 22nd, 2018 and is now the longest shutdown in US history. This is having an impact on many sectors but one being watched closely by the mobility industry is the impact on mortgages.
Below are some of the effects the shutdown has had:
- Depending on where your relocating employee is in the approval process for a USDA loan, they may be impacted and their closing delayed. Lenders are reaching out as quickly as possible to those that may be affected.
- Tax transcripts may now be ordered, but lenders may still request further documentation from your relocating employee while the IRS works its way through the backlog.
- Lenders cannot order verifications of employment for government employees.
- The National Flood Insurance Program (NFIP) has decided to let people purchase and renew flood insurance policies again if applicable. Legislation was passed Dec. 21, 2018 to extend the National Flood Insurance Program through May 31. The Federal Emergency Management Agency, or FEMA, which oversees the NFIP, is still selling and approving new policies.
- If your relocating employee needs a payoff or title-related subordination from a government agency, only the Department of Housing and Urban Development (HUD) is processing those at this time.
- As of now, FHA and VA loans are unaffected.
A January 2019 National Association of Realtors survey of 2,211 members found 75 percent had no impact to their contract signings or closings. However, 11 percent did report an impact on current clients and 11 percent on potential clients.
The most common impact, at 25 percent, was the buyer decided not to buy due to general economic uncertainty, though they were not a federal government employee. Among those impacted by the shutdown, 17 percent had a closing delay because of a USDA loan.
Please feel free to reach out to your CRI Client Services representative if you have any further